Proposed Legislation Would Triple the VA Refinance Fee (But Many Veterans Are Exempt)
Refinancing your VA loan could soon cost nearly three times what it does today. Veterans with a service-connected disability rating don’t pay that fee at all.
A bill in Congress, the Take Care of America’s Veterans Act, would raise the funding fee on VA’s streamlined refinance, the Interest Rate Reduction Refinance Loan, or IRRRL. The bill, H.R. 9237, increases the fee from 0.50% to 1.42%. On a $300,000 loan, that’s $4,260 instead of $1,500.
"Who skips the fee is broader than most Veterans think. The waiver covers any rating from 10% to 100%", said Michael S. Figlioli, chief of staff of the VFW Washington Office.
“Many times, people think that you must be 100% rated or permanent and total to qualify,” he said.
A New Benefit, and a Second Fee
Rep. Mike Bost, chairman of the House Committee on Veterans’ Affairs, introduced the bill June 10, 2026. It bundles more than 60 Veterans bills together, and the proposed fee sits right next to a new benefit.
It adds $833.33 a month for Veterans already eligible for VA’s aid and attendance allowance, which goes to Veterans who need help with daily care such as bathing, feeding and dressing. The payments would start December 1, 2026. The same section also raises compensation for surviving spouses.
A second fee goes up too. If someone takes over your VA loan when you sell your home, that loan assumption fee would double from 0.50% to 1.00%.
Where the Bill Stands
None of this is law yet. The House has not passed H.R. 9237.
The bill came to the floor in July under a closed rule, which meant members couldn’t offer changes to it. Rep. Mark Takano of California, the committee’s ranking Democrat, had filed three amendments to strike the refinance fee increase, House Rules Committee records show. None of them got a vote.
A vote to send the bill back to committee failed 210-211 on July 16, and the House put off further action.
However, it isn’t dead. Communications Director Kathleen McCarthy, writing for the House Committee on Veterans’ Affairs, said the bill “is expected to be considered before the end of the year.”
What the Higher Fee Means for Your Refinance
If you do owe the fee, the increase doesn’t block you from refinancing. Under federal law, 38 U.S.C. 3709, a VA refinance has to pay for itself within 36 months using lower monthly payments, and VA doesn’t count the funding fee in that test.
But the cost still lands on you. On a $300,000 loan, that’s $2,760 more than today, so if refinancing lowers your payment by $200 a month, you’d need about 14 extra months just to break even on the fee.
The VA backed nearly 120,000 streamlined refinances in fiscal year 2025, more than double the roughly 51,000 the year before, according to VA’s loan volume data. What that data doesn’t show is how many of those borrowers had to pay the fee.
That high volume is why some lenders want the increase stopped. The Mortgage Bankers Association said it could not support the fee language as drafted and asked Congress to remove or change it.
The Committee Pushes Back
The committee doesn’t think the fee will stop Veterans from refinancing.
Asked about the mortgage industry’s criticisms, McCarthy said in a written response that a Veteran who already owns a home “would most likely not be at risk of defaulting on their mortgage with the small change in refinancing fees.”
The committee’s argument is that the higher fee pays for the new benefits. McCarthy said the change would increase VA benefits for millions of disabled veterans and Gold Star families.
Asked what a Veteran weighing a refinance should know, McCarthy said Veterans
“...should be entrusted to make the personal financial decisions that best benefit them and their family.”
Don’t Pay a Fee You Don’t Owe
If your claim is still pending, tell your lender. Figlioli said you can ask VA for a memorandum rating, which is a memo confirming to your lender that you qualify for home loan benefits and that a decision is still pending. That often keeps the fee out of your approved amount in the first place.
If you already paid it and your rating comes through later, ask your lender to submit VA Form 26-8937 with a copy of your rating decision to get the fee refunded.
Active-duty Purple Heart recipients and certain surviving spouses can have the fee waived as well. Figlioli recommends working with a VA accredited representative.
Check your rating before you start a refinance, not after. If this bill passes and you qualify for the waiver, that one step is worth thousands of dollars.
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BY MICHAEL MADRID
Military News & Gear Specialist at VeteranLife
Michael Madrid is a dedicated writer whose reporting brings clarity and authenticity to the stories of military members and their families. Having grown up in the shadow of Fort Bliss as the son of a Marine and grandson of Veterans, he possesses an understanding of the sacrifices made by those who...
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Michael Madrid is a dedicated writer whose reporting brings clarity and authenticity to the stories of military members and their families. Having grown up in the shadow of Fort Bliss as the son of a Marine and grandson of Veterans, he possesses an understanding of the sacrifices made by those who...
